American Eagle Outfitters, Inc. (NYSE: AEO) announced financial results for Q2 2025, with operating income of $103 million on revenue of $1.28 billion.
The company exceeded expectations with share repurchases totaling $231 million, reducing shares by approximately 10% of outstanding diluted shares.
Key drivers of improved performance included higher demand, lower promotions, and well-managed expenses.
Aerie's top-line increase and successful marketing campaigns contributed to the second-highest enterprise revenues ever recorded for the second quarter.
The fall season began positively with stronger product offerings and increased customer engagement.
Revenue Performance
Total net revenue of $1.28 billion decreased by 1% compared to the previous year, with Aerie comparable sales growing by 3%.
Profitability and Margins
Gross profit was $500 million, with a gross margin of 38.9%, driven by improved merchandise margins and lower markdowns.
Shareholder Value
Year-to-date share repurchases totaled $231 million, reducing shares by 10%, and quarterly cash dividends amounted to $21 million.
- The company's operating income increased by 2% to $103 million, with an operating margin of 8.0% expanding by 20 basis points compared to the previous year.
- Diluted earnings per share rose by 15% to $0.45, with average diluted shares outstanding at 172 million.
- Total ending inventory increased by 8% to $718 million, mainly reflecting the impact of tariffs on inventory costs.
American Eagle Outfitters showcased a positive performance in Q2 2025, driven by strategic initiatives, successful marketing efforts, and increased customer engagement. The company's focus on profitability, inventory management, and shareholder returns positions it for continued growth and value creation.